State and city officials want to redevelop the 5.5-acre site of the Veolia steam plant (above) and an adjacent MassDOT office building

By Tim Logan
Globe Staff
February 09, 2016

A prime piece of state-owned land at the southern entrance to downtown Boston is going on the market.

State and city officials said Tuesday they are seeking developers for a 5.5-acre parcel of land along Kneeland Street near the Southeast Expressway that is now home to an office building for the Massachusetts Department of Transportation and the Veolia steam plant.

It’s the highest-profile parcel yet to be marketed in a new push by the Baker administration to put state-owned sites into the hands of private developers. And sitting near the Financial District, a block from South Station and alongside highway off-ramps for Interstate 93 and the Massachusetts Turnpike, it’s a prime spot for a major development.

The state and city of Boston will launch a series of community meetings next month to gather input from neighborhood groups. They’ll use that information to help craft a request for proposals that will be used to select a developer.

Any plan would need to incorporate the Veolia steam plant, which provides heating and cooling to many downtown office building. The plant must be taken down and a replacement steam facility built underneath the new buildings. Meanwhile MassDOT would either get offices inside the new development or relocate.

City and state officials said the Veolia site — which runs along Kneeland Street between Albany Street and the I-93 off-ramp alongside South Station — could house 1.5 million to 2 million square feet of new development, including housing, offices, and open space.

The focus at Tuesday’s announcement was on housing. Mayor Martin Walsh and his housing chief Sheila Dillon both spoke about the need for more housing for lower- and middle-income Boston residents, and the rare opportunity to guide development of such a big parcel of land in the heart of the city.

“Boston is just 48 square miles, which makes building lots of housing that much harder,” Dillon said. “Our land resources are finite, which is why this is so important.”

Housing has also been a priority for neighborhood groups in Chinatown, which will have a voice in designing the request for proposals.

A similar process a decade ago on a state-owned parcel nearby on Kneeland Street resulted in a new apartment development, known as One Greenway, that set aside 40 percent of its units at affordable rents — more than three times the typical set-aside in Boston. Both the market-rate and affordable apartments opened last year, while a second building of affordably-priced condos is expected to break ground this spring.

Angie Liou, acting executive director of the Asian Community Development Corp., said Chinatown housing advocates will take an active role in deciding what goes on the Veolia site.

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“Whenever they have these meetings, we’ll be there,” she said.

Whether for housing or job-creating activities or open space, many underused state-owned properties could — and should — be repurposed, Baker said. The state is the biggest property owner in Massachusetts, and Baker said too much of it sits vacant, or in this case not used to its fullest potential. The governor is pledging to make hundreds of state-owned properties easier to acquire, and build on.

“It makes me crazy when I look out and see all these sites,” Baker said. “It’s a big missed opportunity.”